By the fall of 2009, we realized our troubles with the IRS were not going to go away and we were likely going to have to fight them. And, by then, we had the state breathing down our necks as well – can it get any worse?
In early September, we advised Boetz that we were represented by JW at MLF, and introduced them to each other online. We corresponded with both of them, supplying more information about Tracts #4 and #10. Boetz sent forms to me to sign that we are the “Tax Matters Partner,” for all of the Conservation Easements, and JW told me to proceed with that.
Meanwhile, our donating partners had started receiving what is called a “30-day letter.” JW had told us that we should not respond to the 30-day letter, which would then force the IRS down a different path than if the taxpayer responds[1].
A flurry of emails between me, the partners, and JW ensued, and by this time we were demanding that JW send us an engagement letter for him and his firm. My records show that I consistently requested the engagement letter from September 9, 2009 to October 23, 2009. Meanwhile, JW continued to represent us without the engagement letter.
The IRS had sent a request for extensions to all the donating partners (ostensibly so they could dig up more dirt on us). On October 23, JW advised me to advise our partners not to sign those requests, and that by the end of the day he would send our engagement letter to us. So upon his advice, I sent a letter to the partners telling them not to grant the extensions to the IRS and to watch for anything they might have to sign from JW.
I asked at the outset of this post, “Can it Get any Worse?” Yes, it can! Abruptly, on October 26, 2009, JW at the Major Law Firm (MLF), declined to take our case. We were stunned. We had hunted high and low to find him, we needed to take action, we had worked with him for at least 14 months, he told us October 23 to expect a fee agreement by the end of the day, and now he refused to proceed.
Do you want to know why? Because JW’s Major Law Firm also represented Todd, our original C.E. attorney (along with Wishful Thinking, Todd’s very big law firm), and people were beginning to sue Todd and Wishful Thinking because many of them were also having problems with the IRS and the State. And, even though we had hired JW to represent us against the IRS, JW and MLF were afraid we were going to sue Todd, too, which would clearly be a conflict of interest for them. Except, JW at MLF knew this all along, and strung us along for 14 months, then threw us under the bus. (To JW’s credit, he never billed us for his time, so at least this wasn’t a serious “money-down-the-drain” episode, but it was a “time wasted” episode.)
While the thought of suing Todd had certainly crossed our minds, we still did not consider it an option. First of all, we still saw this as a witch-hunt by Erin Toll and a lot of misguided folks in the State, but we were getting nervous about all the people who were suing him. And, second, we still did not see that he had done anything wrong, so if there was no negligence on his part, there were no grounds for suing him.
So, on October 26, 2009, we were abandoned by JW and Major Law Firm and again frantically searched for new representation, finally coming up with a team at A&J. In mid-November of 2009, we signed a fee agreement with A&J, and asked them to proceed in filing our cases against the IRS. (Dear Reader, please note that we brought the cases against the IRS for disallowing our charitable contributions based on the conservation easements when there was no basis for them to disallow them. I say this because some folks have been critical of us, believing that we were the ones who got sued. We did not.) By the time we signed found A&J, we had also become convinced that we needed to preserve our right to sue Todd, (although, as mentioned above, we were still unclear exactly what negligence or malpractice had occurred), so we asked A&J to take on the “potential” malpractice case as well.
So, guess what Stan and Sharon were doing again? Remember all those documents we had provided to the IRS, and then to the state, and then to JW at MLF? We had to start all over again and provide them to A&J. So, for the remainder of 2009, Stan and I worked our butts off again to provide the data necessary for A&J to proceed. Dear Reader, please remember that we had 23 partners (I was partner #24) and there were 15 separate Conservation Easements…that’s a lot of paperwork!
Late in 2009, Joan Dittmer wrote a vague Op-Ed in The Denver Post (see attachment below) that supported the Conservation Easement program in Colorado, but without apparently understanding that hundreds of landowners were being egregiously hurt by the very process she was lauding. But, at least she came out in favor of the conservation easements and explained their inherent value to the citizens of the state!
We closed out 2009 gearing up to fight the IRS and wondering what was next from the State of Colorado. ©Sharon Cairns Mann
[1] To explain this, I use a later memo from another law firm, “A taxpayer can challenge a 30-day letter by filing a Protest, which will cause their dispute to be sent to the IRS Appeals Office to discuss settlement. In our experience, however, Protests often turn out to be a ‘less preferred procedural path.’ This is particularly true in conservation easement cases because the IRS has designated conservation easement cases as “coordinated cases.” When considering coordinated cases, the IRS Appeals Office does not have the same settlement discretion that it would otherwise have in a case that is not a coordinated case. There is often no meaningful settlement potential at the Protest stage in a coordinated case.”
In early September, we advised Boetz that we were represented by JW at MLF, and introduced them to each other online. We corresponded with both of them, supplying more information about Tracts #4 and #10. Boetz sent forms to me to sign that we are the “Tax Matters Partner,” for all of the Conservation Easements, and JW told me to proceed with that.
Meanwhile, our donating partners had started receiving what is called a “30-day letter.” JW had told us that we should not respond to the 30-day letter, which would then force the IRS down a different path than if the taxpayer responds[1].
A flurry of emails between me, the partners, and JW ensued, and by this time we were demanding that JW send us an engagement letter for him and his firm. My records show that I consistently requested the engagement letter from September 9, 2009 to October 23, 2009. Meanwhile, JW continued to represent us without the engagement letter.
The IRS had sent a request for extensions to all the donating partners (ostensibly so they could dig up more dirt on us). On October 23, JW advised me to advise our partners not to sign those requests, and that by the end of the day he would send our engagement letter to us. So upon his advice, I sent a letter to the partners telling them not to grant the extensions to the IRS and to watch for anything they might have to sign from JW.
I asked at the outset of this post, “Can it Get any Worse?” Yes, it can! Abruptly, on October 26, 2009, JW at the Major Law Firm (MLF), declined to take our case. We were stunned. We had hunted high and low to find him, we needed to take action, we had worked with him for at least 14 months, he told us October 23 to expect a fee agreement by the end of the day, and now he refused to proceed.
Do you want to know why? Because JW’s Major Law Firm also represented Todd, our original C.E. attorney (along with Wishful Thinking, Todd’s very big law firm), and people were beginning to sue Todd and Wishful Thinking because many of them were also having problems with the IRS and the State. And, even though we had hired JW to represent us against the IRS, JW and MLF were afraid we were going to sue Todd, too, which would clearly be a conflict of interest for them. Except, JW at MLF knew this all along, and strung us along for 14 months, then threw us under the bus. (To JW’s credit, he never billed us for his time, so at least this wasn’t a serious “money-down-the-drain” episode, but it was a “time wasted” episode.)
While the thought of suing Todd had certainly crossed our minds, we still did not consider it an option. First of all, we still saw this as a witch-hunt by Erin Toll and a lot of misguided folks in the State, but we were getting nervous about all the people who were suing him. And, second, we still did not see that he had done anything wrong, so if there was no negligence on his part, there were no grounds for suing him.
So, on October 26, 2009, we were abandoned by JW and Major Law Firm and again frantically searched for new representation, finally coming up with a team at A&J. In mid-November of 2009, we signed a fee agreement with A&J, and asked them to proceed in filing our cases against the IRS. (Dear Reader, please note that we brought the cases against the IRS for disallowing our charitable contributions based on the conservation easements when there was no basis for them to disallow them. I say this because some folks have been critical of us, believing that we were the ones who got sued. We did not.) By the time we signed found A&J, we had also become convinced that we needed to preserve our right to sue Todd, (although, as mentioned above, we were still unclear exactly what negligence or malpractice had occurred), so we asked A&J to take on the “potential” malpractice case as well.
So, guess what Stan and Sharon were doing again? Remember all those documents we had provided to the IRS, and then to the state, and then to JW at MLF? We had to start all over again and provide them to A&J. So, for the remainder of 2009, Stan and I worked our butts off again to provide the data necessary for A&J to proceed. Dear Reader, please remember that we had 23 partners (I was partner #24) and there were 15 separate Conservation Easements…that’s a lot of paperwork!
Late in 2009, Joan Dittmer wrote a vague Op-Ed in The Denver Post (see attachment below) that supported the Conservation Easement program in Colorado, but without apparently understanding that hundreds of landowners were being egregiously hurt by the very process she was lauding. But, at least she came out in favor of the conservation easements and explained their inherent value to the citizens of the state!
We closed out 2009 gearing up to fight the IRS and wondering what was next from the State of Colorado. ©Sharon Cairns Mann
[1] To explain this, I use a later memo from another law firm, “A taxpayer can challenge a 30-day letter by filing a Protest, which will cause their dispute to be sent to the IRS Appeals Office to discuss settlement. In our experience, however, Protests often turn out to be a ‘less preferred procedural path.’ This is particularly true in conservation easement cases because the IRS has designated conservation easement cases as “coordinated cases.” When considering coordinated cases, the IRS Appeals Office does not have the same settlement discretion that it would otherwise have in a case that is not a coordinated case. There is often no meaningful settlement potential at the Protest stage in a coordinated case.”
| blog25.12-09_den_post_op-ed.pdf |
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